Pretty much as we all could have expected, the market escaped a meltdown today and instead pushed off its key floors... rather than breaking under them. The indices have been stuck in a narrow range for weeks now, and nothing changed on Wednesday. It's good news for you, however, as I'm not going to launch a diatribe on where stocks have been and where they're going. If you've been reading the newsletter even just occasionally for the past couple of weeks, then you already know where the floors and ceilings are. Just to add a little color to the current tug-of-war, however, I do want to show you a chart of the S&P 500 and make a quick point about it below. Take a look. Sure enough, the S&P 500's floor at 1980 came into play today. Today's low was 1978.63, and once tested, the floor shoved the index much higher. All told, the market gained about 0.8% on Wednesday, forcing a close just back above the 20-day moving average line. We're not impressed, and we're certainly not bullish based on today's action. The only thing today's advance did was put the S&P 500 right smack dab in the middle of its recent trading range. It's nothing to get excited about. It's going to take a move back above 2010 to really convince me there's any uptrend worth worrying about. Let's just leave it at that and more on to move important things. Our patience will pay off in the long run. Real Estate Isn't Exactly Red Hot, Despite New Home Sales This morning the Census Bureau announced a fairly strong pace of new homes sales for the month of August. We're now buying new homes at a pace of 504,000 per year, up from the pace of 427,000 we saw as of July. It was well-received news too. In the interest of completeness and common sense though, there's a big chunk of the story you're missing... like perspective. Just as a reminder, it was only on Monday we heard from the National Association of Realtors that the existing home sales pace slumped in August, from 5.14 million to 5.05 million. It's not a huge nosedive, but it's not slow-down we can simply dismiss as a little volatility. We'll also add how the FHFA said on Tuesday that home values only rise 0.1% in July (from June's levels). Even so, there's more to the story. As a reminder, last week we learned building permits and housing starts were weak in August. Starts fell from a pace of 1.117 million to 956,000, while permits fell from 1.057 million in July to a pace of only 998,000 last month. So is the real estate market on firm footing, or not? That depends. Like we mentioned to you above, the one thing that's missing with the media's "one off" reports of data when it first comes out is perspective... and context. That's why we make a point of charting much of the data being batted around by the rest of the media at any given time. One piece of information doesn't help you as an investor. You need the whole picture. So, here's the whole picture. Despite the encouraging news regarding new home sales today, from where I sit when I look at this chart of ALL the real estate data, I see a slow-down in the uptrend. That's not the same thing as a downtrend. It just means the housing market - and builders in particular - aren't apt to be the easy big winners they were a couple of years ago. If we see things turn sour to the point of an actual downtrend for most of these numbers, we'll let you know (and we'll probably be the ones to let you know well before anyone else does). Continuing the Dissection of Small Caps We've not forgotten about our promise to dig deeper into the individual small cap sectors. We just haven't had a lot of time or room to put it on the schedule. We're going to make time and room today, however, and cross two more of them off our list. For no particular reason, let's get the examination of the S&P 600 Small Cap Consumer Discretionary and the S&P 600 Energy sectors out of the way. You may recall small cap discretionary stocks were one of the few areas we liked based on earnings growth and valuation. This bullishness didn't change when we looked closer at the individual chart. In fact, I think I like the group a little more now. The image below tells the tale. Earnings growth has been amazingly consistent for these stocks, even if the index itself stalled near the end of last year. I honestly don't get it. Investors have indiscriminately paid a higher price for less reliable groups and stocks, but for some reason investors have been less than thrilled here despite the income growth. Oh well - their loss. The trailing P/E for the group has been whittled down to only 22.06, which is low enough for me. I've got a feeling the S&P 600 Discretionary Index is going to be catapulted out of its narrowing trading range, if for no other reason than this segment of the market is better positioned to do well in a decent economy than any other - people never mind spending to have fun or splurge on themselves. We'll start our search for the best pick within the S&P 600's discretionary stocks this week, starting with G-III Apparel (GIII) and Dorman Products (DORM). If either is worth putting in the portfolio, we'll let you know. As for the S&P 600 Energy Sector's stocks, we didn't like the group then, and we don't like it now. I'm not even sweating the average P/E of 87.4, as the profitable companies are offsetting a lot of unprofitable ones. I just don't like how earnings are a crap shoot, and with the exception of last quarter we haven't seen any real growth in years. All the earnings growth that looks so compelling on the chart is projected growth... not trailing growth. Hats Off to the Guy Who Saw it Comin' On the off-chance you've not heard yet, Wal-Mart (WMT) is getting all the way into the banking business. It was pretty deep into the banking services game already, offering check cashing services and prepaid debit cards in its stores, in addition to offering deposit services on those accounts. It was never technically a bank, however, and therefore never regulated as one. It also didn't offer FDIC protection to its customers, although nobody seemed to really care. Well folks, as of today, Wal-Mart is as much of a bank as anybody would need it to be. Wal-Mart itself still isn't a bank, but it offers a true bank checking account through a third party - Green Dot (GDOT), which is technically a bank and regulated as such. It was an inevitable move, really. The banking industry has been shunning smaller customers for a while (whether it meant to or not), and that gap was an opportunity somebody was going to fill eventually. Wal-Mart, with its wide and deep geographic reach, was in a perfect position to expand its financial services offer just a little more and add checking services to its menu. The real winner from this announcement, however, wasn't Wal-Mart... at least not directly. Wal-Mart won't make enough from providing banking services to fool with. Its goal is to draw a crowd in its stores, and keep them engaged and hopefully spending. The real banking winner here is the middleman, Green Dot. That's why GDOT shares popped more than 25% on Wednesday. Care to guess who owned GDOT well before today? If you guessed the Elite Opportunity subscribers, you guessed right. Now, I'm not saying John Monroe knew Green Dot and Wal-Mart were going to announce a banking account partnership on September 24th of 2014 and that would send GDOT to the moon. I am saying, however, John knew something like this was inevitable, sooner or later, when he bought it in the EO portfolio back on June 10th. The end result is a trade with a big profit in a short period of time. It's not the first time it's happened for Elite Opportunity subscribers either. It's not the second, third, or fourth time Monroe has spotted undervalued stocks that were ripe for a rally either. John does it all the time. Heck, GDOT wasn't even his only big winner today. The Elite Opportunity portfolio named Merrimack Pharmaceuticals (MACK) as a short-term trading idea back on Friday, the 19th, and it was up as much as 16% at one point today. Could your portfolio use a 16% score on less than a week? Yeah, mine too. My point is, if you're not a subscriber to the Elite Opportunity newsletter, you're missing out on some great trading ideas. If you don't believe it, take the free two-week test drive and see for yourself.Here's how to get it. Or, cut and paste this link: https://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/